Petrobras expands European connections

Petrobras made two partnership announcements in the past 3 days, in Portugal with Galp Energia and in Brazil, with French Tereos International.

The Brazilian petroleum company will partner with Galp Energia to produce biodiesel (green-diesel) in Portugal. Production in that country should be around 250 000 tonnes / year, by 2015. At the same time, Petrobras announced on Friday that it had acquired 45.7% of Açúcar Guarani for R$1.6bn (equivalent to R$5.83/share, or US$102/ton of capacity). Petrobras entered a partnership with Tereos Internacional for joint investments in ethanol, sugar and bioenergy production. The vehicle for the transaction will be Petrobras Biocombustível S.A., the oil company’s biofuels subsidiary, according to Bradesco Corretora’s analyst Auro Rozenbaum.

As announced recently, Guarani will be delisted and incorporated into a company to be called Tereos Internacional. However Petrobras, will keep its stake in Guarani and not migrate to Tereos Internacional. The company’s stake can be expanded to 49% in the case of additional capital increases.

The production of biodiesel in Portugal will be for the European market, with priority given to the Iberian market.

The strategy to supply the biodiesel plant in Portugal providing for the establishment of an agro-industrial pole in Brazil for the cultivation of palm oil (palm oil), with production of about 300 000 tonnes / year of palm oil in the state of Para and estimated investment U.S. $ 290 million, with disbursements from 2010 to 2018.

The total estimated investment for the project is around U.S. $ 530 million to be held in equal shares by companies. Such investment, in addition to meeting the criteria of profitability of companies, Petrobras strengthens its position as a producer of biofuel, and allows its strategic presence in the European fuel market.

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About Hildete Vodopives

Hildete de Moraes Vodopives is founder of Brazil Global and of the Harvard Strategists Bureau. She is a member of the Brazilian Investment Analysts Association (APIMEC-Rio) where she served as Corporate Relations Director and later, on the board. Hildete advises companies doing business in Brazil. She lives between Paris and Rio and is a member of the Harvard Club of Paris and of the Mercosur Women’s Forum.
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